People are now more aware of preparing for life’s uncertainties and the future. Saving money provides security and peace of mind for you and your family.
There are several ways to save and invest, but it can also be overwhelming. Here are four tips to start saving and preparing for your future if you are a beginner.
Follow the 50/30/20 Rule.
The principle of the 50/30/20 Rule tells you to divide your net income and allocate it for spending on your needs (50%), wants (30%), and savings (20%).
This budget rule aims to help people reach their financial goals. You can start following this principle by automatically allocating 20% of your monthly income to save, debt repayment, and building your emergency fund.
In the long run, saving through the 50/30/20 Rule can help you prepare for emergencies and retirement.
Keep track of your spending.
Keeping an account of your spending allows you to understand where your money goes. It also helps you set a monthly budget based on your income and expenses.
You can track your spending manually, but use Microsoft Excel or different tracking apps. For instance, you can use the app You Need a Budget (YNAB) to sync your bank accounts and import data from your files to track your expenses.
For couples, you can use the Zeta app, whether you have joint finances. This app lets couples sync various accounts to track spending and manage bills together.
Maintain an energy-saving home.
You can save water at home by ensuring that your plumbing system works correctly. You should regularly check for possible leaks and contact a professional if a problem arises.
Moreover, you can spend less on your electric bill by ensuring that your appliances run smoothly for a more extended period. It’s also better to purchase energy-efficient appliances such as the fridge, washing machine, and dryer.
Check your insurance policies.
Lastly, you can also save money by choosing the right insurance policies for you and your family. If you don’t have an existing insurance policy, you should first assess the type of life insurance you want to buy.
Life insurance with a more extensive coverage amount can become an income replacement if you lose your job. It can also help you pay off your home mortgage and other debts or fund your kids’ college education.
Nowadays, there are many options for insurance policies, as you can even get insurance for your pet’s medical care. If you are still undecided about buying life insurance, you should first focus on financially sound companies.
It’s better if you can research about these companies thoroughly or you can contact a financial advisor. But remember, you should build up your emergency fund first before bundling up your insurance with an investment component.
And that concludes our list of money-saving tips for beginners. If you have more suggestions, you can share them with us!